Kenya government snubbed advice to avert NCPB woes, former top official reveals

By Allan Kisia

NAIROBI, KENYA: The Government ignored an advice that would have saved the troubled National Cereals and Produce Board (NCPB) from imminent collapse, a former top official has said.

Former NCPB managing director Naftali Mogere told the Parliamentary Investments Committee (PIC) yesterday that he wrote to the Ministry of Special Programmes advising on steps that could have been taken to avoid problems in future.

He explained that he had requested the ministry to resolve the matter urgently because of the grim consequences that lied ahead for the cereals board.

“I did not receive a reply until I left. My view at the time was to bring all parties to table to look for solutions to avoid future litigation but it never happened until I came to see the matter in the papers,” stated Mogere.

A local company, Erad Ltd, is seeking Sh500 million from NCPB for breach of contract. The staggering debt of Sh500 million is threatening to cripple NCPB operations and can be traced to the 2004 drought that hit the country.

Letter of credit

Though it did not deliver any maize, Erad is demanding the money after NCPB failed to open a letter of credit (LC), which assured payment. Four companies were awarded a tender to supply the maize in 2004.

Three companies were given the LC, but Erad was denied the letter and went to court to seek Sh500 million in compensation from the board.

On Monday, Mogere while responding to a question by Nominated MP Oburu Oginga, said the contract with Erad was indeed breached.

“The Government did not provide funds to open the letter of credit. We should have called the supplier and requested him not to pursue the matter and perhaps pay for his small costs,” he added.

Mogere joined the cereals board as MD in February 2006 and left the organisation in July 2007. The contract between NCPB and Erad had been signed and terminated before he joined the grain reserve.

He, however, noted that he received letters from Erad, which was threatening to go to court when he was in charge.

Another former NCPB MD, Tirop Kosgey, also appeared before the committee yesterday to shed more light on the controversy.

Kosgey served from September 2003 to February 2006 when he was appointed PS in the Ministry of Housing. He revealed that evaluation of tender documents was not detailed as it ought to be because time was not on their side.